Donating cryptocurrency has steadily gained popularity as almost half of millenials prefer to invest in crypto instead of stocks.
These crypto-investors are now looking to donate cryptocurrencies as they discover that this is one of the most tax efficient ways to support a worthy cause.
Food for Life Global (FFLG) has made it easy to make cryptocurrency donations using The Giving Block platform.
History of Dogecoin
Dogecoin is a meme-based cryptocurrency that was the result of a Twitter joke in 2013.
Named after the shiba inu dog meme known widely as “Doge,” it quickly gained popularity and attracted over a million unique views within the first month.
Created by two software engineers, Billy Markus and Jackson Palmer, this currency is uniquely different from other cryptocurrencies because it does not have a cap on the supply of coins.
Dogecoin has gone up 10,000% since September 2020, outperforming other popular cryptocurrencies.
Dogecoin and Charity
According to Palmer, Dogecoin is, “… something to share for thanks or kudos,” and is commonly used for tipping online and making microtransactions.
This is in line with the practice of people in the Dogecoin community being motivated to donate Dogecoin.
After Dogecoin’s core developer Sporklin died of cancer in April 2021, the Dogecoin community rallied and encouraged cancer nonprofits to accept Dogecoin.
One such charity is the American Cancer Society, which aims to raise $1 million to address the funding shortfall caused by Covid-19.
Dogecoin also supports numerous charities including Doge4Water. The charity made history in 2014 when a Tweet raised $11,000 to provide clean water in Kenya.
Food for Life Global is now also a part of the network of charities that accept Dogecoin!
FFLG Accepts Dogecoin and Other Cryptocurrencies
FFLG prides itself on being a digitally forward charity. We were one of the first charities to adopt cryptocurrency and spearhead the cryptocurrency charity revolution. We accept donations from over 30 different cryptocurrencies including Bitcoin, Curve, Gemini Dollar, Uniswap, and Litecoin.
We are happy to now include Dogecoin in this ever growing list of cryptocurrencies that can be donated.
FFLG is the world’s largest vegan food relief network and by adapting the platform to accept digital currencies, we look forward to engaging a new group of donors.
So, what does a charitable contribution of Dogecoins mean for you?
More specifically, what does it mean to you tax wise?
How Does My Dogecoin Donation Affect My Tax Bill?
The IRS considers virtual currency to be non-cash property so it is not subject to capital gains tax. Donors are also eligible to receive a charitable donation deduction.
As a non-taxable event, the gifting of cryptos also ensures that the nonprofit organization receives the full amount you wish to send.
You will need written acknowledgment from the charity that will allow you to take advantage of these deductions.
Let’s briefly explore these two benefits for tax purposes, shall we?
What Effect Would Dogecoin Donations Have on My Capital Gains Tax Liability?
Typically, cryptocurrencies are taxed between 20% – 30% depending on how long they have been held.
Once cashed or used for goods and services, the taxpayer can expect additional federal income taxes.
When you donate appreciated Dogecoins, you can deduct the appreciated value of the cryptocurrency from your tax liability and avoid these capital gains taxes.
Let’s say you invested in Dogecoins worth $5,000 and held them for more than one year. You then exchange them to buy $25,000 worth of goods and services or sell the coins.
Because the coins have appreciated by $20,000, you will be taxed at long-term capital gain rates on this amount that could be as much as $4,760.
When you donate cryptocurrency, you are not liable to pay these taxes making it a tax-effective method to support a good cause.
Is My Dogecoin Donation Tax Deductible?
It sure is!
By gifting your Dogecoins, you could receive a tax deduction based on your charitable contribution.
The tax deduction is calculated based on the fair market value at the time of your cryptocurrency donation.
Because the value of these currencies fluctuates, it is advisable to consult an expert in the fields of digital assets to determine their fair value.
Support FFLG’s Charitable Work with Dogecoin
We are now living in a “doge-eat-doge” world — yes, we went there — and the cryptocurrency industry is no different.
Because of the unlimited supply, and affordability of Dogecoins, almost anyone can support their favorite charities.
Food for Life Global has made the process of donating Dogecoin quick and easy.
In three simple steps, you can also donate Dogecoin anonymously and receive a tax receipt using the Dogecoin donate button.